Last week, the US Treasury Department submitted a report to the appropriations committees of the House and Senate on strengthening the accountability mechanisms of the World Bank and International Finance Corporation, fulfilling a requirement included in the spending package signed into law earlier this year. The report acknowledges recent increases in caseloads and recommends that both the Inspection Panel and the IFC’s Compliance Advisor Ombudsman (CAO) be allocated larger budgets to carry out their responsibilities.
CGD Policy Blogs
International Finance Corporation CEO Philippe Le Houerou announced that the IFC’s board will undertake a review of its accountability mechanisms, including the office of the Compliance Advisor Ombudsman. The announcement is timely. By initiating a review, IFC’s Board is taking the first step toward a more transparent and accountable operating structure.
The Independent Commission for Aid Impact (ICAI) issued a report this week on the performance of CDC–the UK’s development finance institution–in low-income and fragile states. ICAI gives CDC an Amber/Red rating on its performance, which means “unsatisfactory achievement in most areas, with some positive elements.” In particular, the commission says that CDC has not done enough to monitor its performance.
The US Supreme Court decided, in a ruling on Jam v. International Finance Corporation (IFC), that the IFC can be sued in US courts.
Last week, the United States Supreme Court heard oral arguments in Jam et al v. International Finance Corporation. At stake: the extent to which international organizations including the IFC enjoy immunity from prosecution in US courts.
In November 2015, CGD published a report titled Unintended Consequences of Anti–Money Laundering Policies for Poor Countries. Today we release a follow-up to that report. Policy Responses to De-risking: Progress Report on the CGD Working Group’s 2015 Recommendations takes stock of accomplishments to date, notes where work remains, and recommends concrete actions for international institutions, governments, banks, and others to continue addressing de-risking.
While energy advocates have mostly focused on the 600 million people in sub-Saharan Africa that lack access to electricity at home, the region’s power shortages are especially damaging to firms. Companies across the continent suffer from unreliable power supplies, affecting productivity, employment, and growth.
The International Finance Corporation wants to increase support for both private sector-led development and fragile states. But how viable are these goals?
Moving beyond low income countries makes sense for an institution focused on ending extreme poverty. But does the IFC follow through by focusing on the countries that are home to the extreme poor? Not really.
Policies put in place to counter financial crimes have unfortunately had a chilling effect on banks’ willingness to do business in markets perceived to be risky—due in part to the high price of compliance. Even as changes are being made to address this problem, financial institutions are developing solutions in the form of new cutting-edge technologies to help them comply better and faster with anti-money laundering regulations.